PRACTICAL ACCOUNTING 1 - REVIEW RECEIVABLES. PROF. Uc. VALLADOLIO Multiple choice deny the lero he choice that bes! completes the statement or answers the question 1. On December 31, 2020, the accounts receivable control account of Kala Company had a balance of 2,888,000 An analy ofthe accounts receable account showed the folowng ‘Accounts known tobe wetless (wnt. ) P 37500 ‘Advance payments to reators on purchase orders (WR "180,000 Avanoes to afiate companies (YC Faughe) 1 375000 Customers accounts feporing cet balance arsing ‘fom sales etn {aman Labo) (225,000) Interest recevabe on bonds. 180.000, eran cst ema E Ly 730,000 ‘Subscriptions recelvabie due n 90 cays 228,000 Trade accounts ecatvabie = assigned (Kala cpmpany's foqutyin assigned accounts P150,000) (Rul) 75.000 ‘Trade instalment recavabie sue Incuing uneamed trance cnarges 330.900 Trade recovabios fom oficers due curety (me Waseda /22.500 ‘Trade accounts on which post-dated checks ae held (no fenties were made on receiis of chee) mal Maur _/ 75000 REoo ‘Based onthe above information, detemine the adusted balance of allowing! 1. The rage accounts recewable as of December 31,2020 is Pse7 500 Praes.000 Pus22 500, & rae s00 2. The net curent wade and oterreceables a8 of Dacember 3, 2020 4 a passer 500 2272 500, 3. Pa810,000, & Pi22 800 ‘3. How much of he foregoing wil be presente under noncurent assets a8 of December 21, 20207 3. P1,200,000| © s25.000 BP s7sc00 apo 2. Presented below ar a series of unrelated stuatons. Answer the following questions eating o each of the independent stuatons as requested 1 Kala Companys rate al bare at December 3, 270, ned flowing secur: ‘ret Accounts receivable ro08 380 ‘Alowance for doubt accounts 0,000, Saioe 15.000,000 ‘Sales rtums and allowances 700,000 Kala Company estimates ts bad dett expense tobe 1 12% af nt sales. Determine is bad debt ‘expanse for 2020. 3'P226,000 of 214,500 Pasa soo 35,00 2. Ananabsi and song of Connie Corp. accounts recauaba at December 31, 2020, dslosed the ng ‘Amounts estinated to be uneotectible 1,900,000 ‘Account receivable “500,000 ‘Alowance for doubt accounls (per books)" 1.250,000,"Whats the nat realaabe value of Connie reeirabes at Decombe 3, 20207 ‘P35 700 000. = P8250 000 iy Prrsoo.oc0 15, Pr44s0.000, 2. ‘Connie Company provides or doubt acount based 3%-otredi-eies, The folowing data ae ral for 2020, eat sates aunng 2020 2s.000000 ‘Abwance fo dou acount 11/2020 ‘70000 Colleton of aecouts wt of in ps years (Custamer coat was eetalished) 20.000 customer aezount witan of a uncolectble rng 2020 300,000 ‘mais he vatance in alowance fr doubt secouts a December 31, 20207 ‘3 630,000 00000. B pez0000 400 44 Abbe nd oft feat yer of operations, December 31, 2020, Joseph nc reared the folowing ‘eration ‘Accounts eceable, net of aowance for ‘Sout! accounts 9.500000, tomer sccouris wien of as urcaletie ‘zing 2020 240 000 Bed debs expense or 2020 40.000 ‘What shoud be the balance in aecounts ecevate at Deamber 31, 2020 before subtracting he tonance fr oul sceurie? GF noo = P 9740000 r3e0.000 ‘& Pro.s0.000 5. The{otowng accounts were taken tom Joseph rcs statement of fancial sion at December 31 2020, Dest cosa ‘counts recavabe 30000, Net rea sies °° 750,000 outst! accounts ae 33 of zou reclabe determin he bad deb expense tbe repr for 00, ay P123,000, © P223.000 2! P2300 2260003: Joseph Compan’ statement nari ostn shows he account reel balance a Deere? 31, 201925 atoms: ‘Accounts rcovabe 3.600900 ‘Aowance for cout accounts 7200 mame During 2020, ansacton clang to he accounts were a ows 1. Sales on acount, P38 400000. 1 ash received rm coleton of current eeabe fold P31, 360.00, ater count of PEAD00 were alowed for promet payment 1 customer accounts of PY60000 were ascensines tte wortess and were wren ot Bod accounts previously waite of pra to 2020 anourting te P4000 were recoveres 1 The company decked to provide P184,000 for Seu accounts by una enya the end of he veer. 1 conunts recehvable of PS 60.000 have been pledged o 2 loca bank on a loan of P5,200,000 2 Gieatone ar 200 O00 were made on these racevatle (rc neluded he colecton previous Sven) and ppl as pari payment fo te lan. ‘seg onthe above data answer he folowing 1. Tne accounts ecahati as of December 3, 2020's 3" eeec 000 te px340000 psec. 000 6 Paeaco 2, The alowance or dovtil aezauns aso December 3%, 2020's ap eo00 © Pieaco0, Co Pista Pr7ec00 1. The net ealabl value of accounts reeuable a of camber 31, 202015 2 pase 000 ‘peso4 000 4 tfrecenabes are hypohecated again baovngs, the amount of receivables involved should be ‘iscoeed a he eats or oles cured om be ol recevaies, wth dsclsure Exculded fom the fal reclvabls, wth ro dss. 5, Ekgudes fom he toa recoables anda ain or oss reogrzed between the face value and the amount of borowings‘For the year ended December 31, 2020, Kala Corporation revealed thatthe Accounts Receivable account const he folowing. ‘Trade accounts receivable (cure) 3.40000 Pest de ade accounts, 40,000 Ureolete aceouns ‘26000 Cred ances in customer’ acount (20.000) Notes ecshvabie sahonored 240.000 Conant shen cost “Tre conspne sa gods cst PB,000 fr ea c00"A iO cormision me charged Eenagnee andres he ance Rana fe ‘aonwne recaveain nay, 201 _ 320000 Teta Pr ‘The balance ofthe alonanc for doubtful accounts belore aul austen is a crest of P8000. Is estimate hal an alewance sue be mantane o equ 53 of fade racehrables. net of amount Se from te consign wo bonded The company hae nit proved yt athe 2020 Gos cab expense Based on he above intermaton, elermine eal irc folowing 1. Trae accounts reeivate 24080 000 Q ressuooo 5 a0 000 Pas 00 2. Allowance for doubt accounts 204000 e. Pr72000 G Pat8000 178200, 3. pub accounts expense ae o00 fe P2szo00 ©. pxz000 4. 727200, 5. Jere Company was organized 2020, Forhe yet endedDecemer’3, 2020, fre made avalatle the flowing information, “Total merenanice purchases forthe year 7.600000 Meronanie ventory at December 31 143000 ‘At metenanise was maredto sel a 40% above cost Assuring tha al ses ae on cesta nd fecowabies are cole wht should be he blanc in acauts receivable at December 37, 20207, 21 000,000 340.000 © 6000000 4 §800000 6 Joseph Company proved orn information on hes nancial records on December 31,2020 Accounts reclabe January 1 1.920000 Ceectone of acount eave 6240000 Bas deve “00000 ‘ventory, Janay 1 -2a80.000 Inventory, December 31 ‘ooo ‘Accounts payable, ruse 1 41000000 ‘counts payable, Dace 31 1500000, Cah sl 1200000 arena 44300.000 Grose Prt on Saas 2180 000 ‘Wats the ending balance o accounts receivable on Oecarber 31, 20207©.3:3120000 «44080000 eat Co, puchased fom Oak Co. 8 20,000 8%, fee nol tat equ fy Gal aol year-end ‘ayments of 008, The note wat ciscouned oye rate Leal Ate date of puchase Cea "eeordedtho not tts preset value ot 18485 Wha! enous be the tal iter venue eam By eat over tet ot tha not? ‘5048 560 000 9.000 ‘On sanvary 1, 2020, JP Co sls ts equement wth a carting vale of PY60000 The company ‘eceives a non-inerest bear ate ave 3 ears tha face srr ef P200.000 There 8a siablshed mare vale fre equipment the prevatng restate 8 ate! Ps pe 12%, ‘The folowing are the present vate aca af 12% Preset valu of fo 3 perioss one Present valu of an ora arty of for 9 prods 240188 se oat treet 4000050 8 \wnatis tne gan or loss tobe recegized on he sl othe equip? 92. he iscount on nteeceable on January 1,202, ¢ sree ° © 49000 ire (29.Thesisount arbor at the ad fhe ne Yo using he ecbve ners! metre 2938 Jason Co, assigned 1,000,000 of accounts acai o Quek Fnance Co a sear for @ loan of 240,000 Quix charge a 2% conmisacan onthe arau ofhe loa, theres ‘te ote nla at 10%. Dusng the fat math Jason clei 220,000 on atsgned accounts afer ceducing 160 ot scours vasonaccepies etre worh 2.700 an wrote of eines ccna talng 7.200, 121. Te amount cath Jason eceved tom Quick athe time ofthe ale was 3" 759,000, b a2n.00 2 223200 4 s40.000 (22. Enis uring the frst moth #8 cde eb to Cash of 20 70. ‘eb fo B38 Debt Expense of 7 00 {abet Alowance for Doubt Account of 7,400, debt Accounts Receabie of 730860.10. On December 1, 2020, Hero Company assigned P400 000 of accounts receivable in consideration for 3 . asso accounts receabe in lean of 335,000 to Halo Company charged a 2% commission onthe aroun ofthe loan the terest te ign the note was 10% During December, Hare caletasP110,000 on assigned accounts ae deducing F980 of escouns. Hero acceped returns woth PY, 380 and wrte of assigned accounts oP2.960 Question 1 How much cash di Hero receive tom Halo at he te fhe raneler? 3) P08 500. 228 300, 3) 327.000 336000 Question 2 ‘ina she caying value ofthe account receivable aelgned as of December 31, 20207 Nove ©) 268 620 285.200) P36,000, 11. Ontho February 1, 2020, New York Corporation factored recavales wih a caying of 2,000,000 Chicago Corperaton. New York Corporation abcesse aa nance charge ofS ofthe recevables and felane 5% ofthe revansbies Question t: Ifthe tactorng rested a 2 ele, wnat aroun of ss rom ela sul he company repot ins 2020 Statement of eomprebensive name forthe ya 20207, none prov 000 000 13) 160,000 Question 2: _Assue tat New York Company relines signifier amount of tk and rear of ownership and had ‘3 contnang involvement onthe factored francal sete wat amount oss factorng shoud the pany recognize? os «P1000 000 ‘9°160,000 12, Cala Recowved tom a custome 3 ita, P75 b0 ole bearing anvil nro 8% Aer haling the nl or sir month, Cara sseaunle the noe at Bank at an alocbe eret ate of 10% (1. How much snbuir cara receive Ho Bik? a 37120 0 (22 tthe ecountng ie teats 9 al, what amour on scouting shoud Car recognize? 5250 2 a7e0 20250 13, Pink Bank granted @ 10-yoar loan to Bide Company in tho amount of Pt,500,000 with a stated interest ‘ate, Payments se ve mandy and are computes to be 16650. Prk Bank ncured P40,C00 of ‘ect lean origination cxet and P20,000 of nec loan oigaion cos. n adaion, the Bank charg ‘Blue Company a 434 nonetunadi oan engnaton fee Pang, be nde, hae caring amount ot 4.000 e 1a0000 {Soom ‘S200 448000 11480000, 1500000 a ofr the borower, as caring amount of.1820,000 14. + sc Bank granted a loan toa borawer inthe amount of P5\000,000 on January 1, 2020. The interest ‘ate onthe loan is 10% payable annually staring December 31,2020. The loan matures in five years oo December 3, 2022. PN Bank incur P39,400 a direct lan oginaton cost and P10,000 of incre: oan fenton coat In aditon, PNB Bank charges te barewer an pont rrrfingabe lan oration ‘Based on the above information, answer the flowing (Round off present valve factors to four decimal places) 1. The carying amount ofthe loan a8 of January 1, 2020 is "5.000000, ©, P5080 400 b/Pa.639,400, 4 Pa.ee9.400 2, The efectve interest ate ofthe loans 2" y.00% 12.00% Bre “a80% 3. The lnterest come to be recognized in 2020 is "ps00,000 c Pagse6: . P555,138, 4 P96 728 4. The carying amount ofthe loan as of December 31, 2020 is a" p5,000,000 © P5035.281 5, Pa.90.128 3 Pa708 536 15. OnJanuary 1.2019, Omar Company loaned Alex Company amounting oP2,000,000 and eceved atwo oor, 60 P200,600 nats. The note cal fo" annual Ineost fo be pad eatn Oscerber 31 Om Colca the 2019 nest on schedule. Howeveron December 3%, 2020, based onthe Alex's recent Financia difcties, Omar expects thatthe 2020 terest, which was recorded in the books, wil net be Cotected an tat oly P.200,000 of te pncpa wil be recovered. The P1,200,000 principal amount ‘ipectod to be coleced lo two equa istaurmens on Decomber 31, 2022 and December 34,2024. The ‘revang restate for slr fype of note as of December 81,2020 1 8%, ‘Based onthe above nfo ais De followin” (Round af preset value factor to four decinas places) 1 The present value ofthe expected ture cash Nows t December 31,2020 is oP 955,900, ¢/ 81,008 260 | B. P2070:060, 080.920, 2, Theloan inpatment oss in 2020 is a pitesz0, e/ P1.110740 3 P'960.740, Pr 4o,s40 ‘3. How much s the interest income forthe year 20217 ay P 80.56 ©. 57.323, BY Pazera apo 4 Carying amount ofthe loan a8 of Dacomber 31,2022 is 3 parses ePi,738 032 By saan: 3 PHt3¢008 16. At December 21,2020, Josh Co. had a receivabie from A Compiy i 400,000 that has been ‘utstanding fr gute some time, Further vestigation revealed hat F Company is taking ovr to run ang porate the business atfars OFA Company. However F Company is mee than wllng fo assure ony SEC orA'company’s sblgaton and pay fy the end ot 2021 Althetime the recelvabe was ecognaes the prevading fate of noes! or simlar financial asset is 14%7 hat anc shu canes esha on Decanter 31,220 sateen! aca 2. 135.849, 283,187 300,000 ‘400,000 (22. How much impsiment loss shou be recognize related its accounts ecsvabe in owmuch imal cogrze related is accounts 9, 136849, ¥ 263,157 300,000 400.000 (On December 31,2020, generat edger of Marin Company's account ecavale showed a tlance of 400,000 Because of contnung decrease n expected cash fows ons financial ess. Marin ‘Company nas geaies to estate he cash fom of the oustanding recawstias, The estas ae based onthe expected peso aroun ob recov on the oustanding recavables. the category 298) wien ase cludes the lngth and patio feasts an me face for mar borowers Gateaon amount Time Factor Paceeto * 8 8 300000826 e 250000 751 5 ‘sooo ea Question 1: How much should Marin Company reports account recivabl nits December 31,2020 statement of franca poster? 3)Pres.ts0e)P%200000, pPvoreco§——«)Pi-ao.on0 ‘Queston 2: What amount floss impaiment on acento should Marin Company ecogizin its December 31,2020 statment of compranansie come? ‘ye200,000 )ps00 880 )e300,000 9Pa08.400 is equpmont used in manufacunng prarmacevtcals. On Decambor 31,2020, Rosall's accounts ‘ecelvable areas alow (ndttuatysanficantacaabies Firiey Company 0.000 Rese 200,000 FratelCo ‘0000 ante ine 00.000 ‘Alor receivabies 500.000 faa 1.400800 Resale Corporation determines that Frey Company resevale is mpaies by 40,000 and Huser, Inc's recavabia'Yotaly mpaved. The aber recsvables ror Rafal and Ris ae not Consors Impaves Rosle detormines Dats compost rat f 2% ls aporoprate o measure mpaiment cn 3 (er ecpvalos What the lll mpamert of resiabes ar Rorae Corporation for 20207 "56 400 40000 © s0c00 25600, ‘en ins GIB 000.00 of ts ezourtsreceais wih gurarie(ecarse) 3 rane rage of 5 Toe trane company reams an aman equa 010k of he ser acewase fer posse ‘Sueent Wat wos be recoded 98 gan fos) nha Want ofreabien? Gant 000 ema Eo